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Q. Explain Critical Appraisal of Chamberlins theory?
a. Chamberlin assumed that monopolist competitors act independently and their price manicuring goes unnoticed by the rival firms. This assumption was questioned
b. His model implicitly assumes that monopolistically competitive firms do not learn from their part experience. They continued to commit the mistakes of reducing their prices even if successive price reductions lead to decrease in their profits.
c. His concept of industry as a "Product group" is ambiguous
d. His heroic assumption of identical cost and revenue curies are questionable e. So far as empirical validity is Chamberlin concept of monopolistic competition is concerned, it is difficult to find any example in the real world to which his model of monopolistic competition is relevant.
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